CPI, the Dollar, and US Yields Propel Gold Prices Higher
Updated
CPI, the Dollar, and US Yields Propel Gold Prices Higher
The US Consumer Price Index (CPI) significantly influences market movements, especially given the recent heightened media attention and the accelerating price pressures over the past two months. Consequently, the market welcomed the news that the monthly CPI fell from the previous 0.4% to 0.3%, with both headline and core measures also coming in lower, albeit in line with estimates.
The US dollar, as measured by the US Dollar Index (DXY), sold off immediately following the CPI release, which allowed gold prices to rise. Gold is generally more attractive when interest rates are expected to decline because the opportunity cost of holding this non-interest-bearing asset decreases. Additionally, US Treasury yields dropped sharply, further boosting gold prices.
Technical Analysis of Gold
Gold prices are poised to potentially test their all-time high if the current bullish momentum develops into a more sustained uptrend. Softer CPI data and more dovish interest rate expectations, with the market pricing in two full rate cuts by the end of the year, have contributed to gold's recent strength.
Gold is likely to retest levels around 2379 or 2368. A stable price above 2379 could trigger a bullish trend, aiming for targets of 2397 and 2409. Stability above the resistance level at 2397 would suggest the beginning of a new bullish phase, potentially leading to a new record high.
In summary, a reversal and a candle close above 2388 would indicate the continuation of the bullish trend.
Pivot Price: 2388
Resistance Levels: 2397, 2409, 2426
Support Levels: 2379, 2368, 2357
Today's anticipated trading range is between the support level at 2379 and the resistance level at 2409.
The US Consumer Price Index (CPI) significantly influences market movements, especially given the recent heightened media attention and the accelerating price pressures over the past two months. Consequently, the market welcomed the news that the monthly CPI fell from the previous 0.4% to 0.3%, with both headline and core measures also coming in lower, albeit in line with estimates.
The US dollar, as measured by the US Dollar Index (DXY), sold off immediately following the CPI release, which allowed gold prices to rise. Gold is generally more attractive when interest rates are expected to decline because the opportunity cost of holding this non-interest-bearing asset decreases. Additionally, US Treasury yields dropped sharply, further boosting gold prices.
Technical Analysis of Gold
Gold prices are poised to potentially test their all-time high if the current bullish momentum develops into a more sustained uptrend. Softer CPI data and more dovish interest rate expectations, with the market pricing in two full rate cuts by the end of the year, have contributed to gold's recent strength.
Gold is likely to retest levels around 2379 or 2368. A stable price above 2379 could trigger a bullish trend, aiming for targets of 2397 and 2409. Stability above the resistance level at 2397 would suggest the beginning of a new bullish phase, potentially leading to a new record high.
In summary, a reversal and a candle close above 2388 would indicate the continuation of the bullish trend.
Pivot Price: 2388
Resistance Levels: 2397, 2409, 2426
Support Levels: 2379, 2368, 2357
Today's anticipated trading range is between the support level at 2379 and the resistance level at 2409.
Note
the price corrected to their support line and again pushed up as we mentioned in the previous chart, so now it is possible to reach the resistance line 2397 and then break that to start the next bullish area
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